IOT signs up new client for coal-powered blockchain plant
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IOT Group has signed a deal with a Bitcoin mining equipment provider — but it’s conditional on details like getting a whole coal fired power station running again.
The deal with Royalti Blockchain Group — the Australian reseller of Bitcoin equipment maker Bitfury — is conditional on a separate company, Hunter Energy, buying and recommissioning the long-shuttered Redbank plant.
“Investors should note that, without limitation, if Hunter does not complete its acquisition of the Redbank Power Station to the absolute satisfaction of IOT, or if completion does not occur under the terms sheet between IOT and Hunter… the transaction… will not proceed,” IOT said.
Under the deal, Royalti would install its hardware on the site and buy from IOT 20 megawatts of “behind the grid” power for at least five years at 11c per KWh.
“Behind the grid” means a company or person has direct access to wholesale energy prices.
To put that in perspective, retail rates are between 27c to 46c/KWh.
Even without restarting coal power plants, as IOT is trying to do, cryptocurrency mining is becoming an environmental issue as it uses so much energy.
The estimated annual energy use of Bitcoin alone is 64.54 terawatt hours, up from 49 terawatt hours in February.
Bitcoin and other crypto miners race each other to verify transactions on the various blockchains, using powerful computers to compete. The miner to complete the verification is paid in cryptocurrency.
IOT Group started out selling Internet television, smart watches and selfie drones. It refocused on the drones last year after the earlier two didn’t work out.
It has since admitted that it hasn’t been so great at drones either, and has invested in a Sydney delivery service and is now repositioning as a blockchain power provider.
IOT shares were flat at 0.4c.